Taking stock of the opportunities available
The days of dealers repeatedly using the same handful of sources time after time are quickly disappearing as competition for the best stock intensifies and digital channels make every corner of the nation easier to reach.
We discover how dealers are navigating this new opportunity and what benefits they’ve realised so far.
With the expansion in online channels has come increased stock sourcing options for dealers. At the click of a mouse, dealers can now open up a gateway to a wide and varied range of stock opportunities that cut across every territory in the country.
However, with such increased opportunity comes increased competition. As a result, dealers are having to re-evaluate their stock sourcing strategies to take account of all the opportunities now available.
Our latest NextGear Capital sentiment survey results show that dealers are doing exactly that. They are developing multi-channel strategies to help them map out the opportunities in the market, with online channels growing in popularity.
Taking a multi-channel approach
Around one in two dealers said they sourced stock from a variety of channels including both physical and online auctions, trade-to-trade platforms and other dealers in order to secure the right stock at the right price.
One in four of all dealers reported using digital-only channels when sourcing stock, with many dealers being prepared to purchase stock from online channels outside their traditional, local territories.
It suggests dealers are becoming increasingly emboldened when purchasing stock online, searching out opportunities across a multitude of channels and platforms such as Dealer- Auction.com and Auto Trader to secure the best quality stock for their business.
While online channels are becoming increasingly important in a dealers’ stock sourcing armoury, physically visiting an auction - particularly one that is local to them - is still a popular option.
Around two-thirds of dealers surveyed said they still regularly visit their local auction site. It suggests that familiarity still breeds a certain amount of content, with dealers taking reassurance from purchasing stock from tried and tested sources.
Local auctions still proving popular
With the opportunity to ‘get up close to the metal’ and interact with other dealers, it’s unsurprising that physical auctions retain popularity among dealers. Attending an auction also helps dealers to reaffirm stock choices that have initially started online but still require the confirmation that can only come from close physical inspection of the vehicle.
Alongside auction channels, further traditional stock sourcing channels such as upstreaming facilities and buying vehicles from other dealers are also still proving popular. For dealers who like to buy stock from other dealers, the numbers are high with one in two still purchasing vehicles in this way.
While the survey results point to dealers using a blended mix of channels, there are some channels beginning to fall out of favour.
One such channel is the classified ads, with only one in ten dealers surveyed still choosing to source stock through this very traditional method.
Dealers close the book on classified ads
Faced with spending valuable time and resource trawling through the classifieds only to be confronted by an increasingly savvy consumer looking for the best price possible, it’s no surprise to see dealers turning to more efficient options.
For instance, when dealers were asked in our survey to give their reasons for buying from multiple sources, well over two-thirds cited securing the best value stock and specific models. Only one in ten cited reasons of convenience.
This shows an increasingly strategic approach to buying stock as dealers resist the temptation to return to familiar and convenient sources in favour of channels that offer value and vehicles most suited to their business.
It’s also a strategy that when combined with a stocking plan to enable even greater business flexibility is likely to produce the most profitable results.